President Nayib Bukele said the government used a local dip in the exchange rate to bolster bitcoin reserves. The state fund bought an additional 420 BTC.
It was a long wait, but worth it.
We just bought the dip!
420 new #Bitcoin🇸🇻
— Nayib Bukele 🇸🇻 (@nayibbukele) October 27, 2021
Bukele stressed that authorities have already realized some profit from the investments in the first cryptocurrency. Because the state bitcoin trust’s balance holds both bitcoins and US dollars, the rise in the price of digital gold creates a surplus that the fund’s managers could withdraw from the accounts.
How do we make a profit if 1 #BTC= 1 #BTC?
We have a trust fund accounted in USD, but the trust is funded by both USD and BTC.
When the BTC part revalues in comparison to the accounting currency (USD), we are able to withdraw some USD and leave the trust with the same total.
— Nayib Bukele 🇸🇻 (@nayibbukele) October 27, 2021
Earlier in October, the president said that part of this profit the country uses for building a veterinary clinic.
With the new investment, the state fund’s balance stands at 1120 BTC (~$68.6 million at the time of writing). According to Disruptiva, the average purchase price, excluding the last tranche, was $50 218.
#Bitcoin Con el precio del BTC de este día a las 9:30 a.m.., si el país vendiera la inversión hecha en 700 bitcoins, se estarían perdiendo $2.5M en comparación con el día de ayer. Las ganancias totales serían de $5.9M. pic.twitter.com/rPkKbPjInw
— Disruptiva (@Disruptiva2) October 27, 2021
One of the country’s largest newspapers El Diario de Hoy criticized the Bukele administration’s actions. The paper noted that authorities closed access to information related to Bitcoin operations for the wider public. The President of the Development Bank of El Salvador, Juan Pablo Durán, explained that the step was necessary to maintain banking secrecy.
Earlier, Ethereum founder Vitalik Buterin called the legalization of Bitcoin in El Salvador ‘reckless’.